Vicarious liability at Christmas: Work, the party, the after-party
Adam Ohringer
Adam Ohringer considers the latest case on vicarious liability in this blog.
As preparations are made for Christmas 2016, the High Court is still cleaning-up from the 2011 party season. The case of Bellman v Northampton Recruitment Ltd [2016] EWHC 3104(QB) provides a useful illustration of the coverage and limits of the doctrine of vicarious liability after its recent extension by the Supreme Court in Mohamud v WM Morrison Supermarkets plc [2016] AC 677.
The not so festive spirit
The Defendant was a small HGV driver recruitment company with 11 members of staff. Mr John Major was the Managing Director and significant shareholder of the company (the judgment does not reveal his exact stake). The Claimant, Mr Clive Bellman worked for the company as a sales manager.
The company – or more precisely - Mr Major organised a Christmas party for staff and their partners. The boozy affair was held at a local golf club and passed without incident. At the end of the party, approximately half of those present took taxis to a local hotel where many had booked rooms. Most of the party continued drinking in the hotel lobby. Some left for bed but a handful of stragglers held out until just before 3am when talk turned to company politics. Mr Major felt that his decision-making, about the allocation of certain members of staff, had been challenged by the Claimant and others. He began an inebriated rant about how he was in charge of the company which culminated in him stating, ‘I fucking make the decisions in this company it’s my business. If I want him based in Northampton he will be fucking based there’. Mr Major then brought home his point by repeatedly punching the Claimant who suffered a life-changing brain injury as a result.
Analysis
The fact that Mr Major had violently assaulted the Claimant was not in dispute but the issue in question was whether the Defendant company was vicariously liable for his actions.
Vicarious liability arises in common law where the wrongdoer:
Is in an employee of the defendant or in a relationship akin to employment; and,
The tort committed is sufficiently connected with the position in which he was employed.
In this case, there was no doubt that vicarious liability could arise because Mr Major was an employee of the Defendant. However, the Judge found that the Defendant was not vicariously liable for Mr Major’s conduct in the circumstances.
The Judge was satisfied that the party at the golf club was a work event which employees such as the Claimant were expected to attend. Although not expressly stated, it is clear that, had the assault happened at the main party, vicarious liability would have been established despite that being outside of working hours and away from the company’s premises. After all, Mr Major was effectively the host.
There was however a distinction between that party and the post-party drinks at the hotel. The Judge described a temporal and also substantive difference. One was not an extension of the other. The drinks at the hotel was no longer a company event; Mr Major was no longer acting in the course of his employment as organiser or host. Furthermore, although the conversation which led to the altercation was work-related, that did not materially change the context: ‘I cannot see that the wide ambit of [Mr Major’s] duties in the company and the fact that the discussion has turned to work as somehow transforming what was clearly a recreational activity into something properly viewed as in the course of employment’.
The Judge said in conclusion that the hotel drinks ‘was, or without any doubt became, an entirely independent, voluntary, and discreet early hours drinking session of a very different nature to the Christmas party and unconnected with the Defendant’s business.’ Once the Judge had put the facts in this way, it was not surprising that they did not give rise to vicarious liability.
Another way of establishing liability?
It is possible that an argument based on the Defendant being primarily liable for the acts of its Managing Director would have had more success. Unfortunately, this does not appear to have been advanced before or considered by the Court.
The conduct of the Managing Director of a company, while he is acting as director, is ascribed to the company. A director is the human embodiment of a company and what a director does in that capacity is done by the company. If the director commits a tort then the company has committed a tort and is held primarily liable as distinct from being vicariously liable.
The distinction between primary and vicarious corporate liability – and how it can arise – was explained by Lord Reid in Tesco Supermarkets Ltd v Nattrass [1972] AC 153 as follows:
A living person has a mind which can have knowledge or intention or be negligent and he has hands to carry out his intentions. A corporation has none of these: it must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company. There is no question of the company being vicariously liable. He is not acting as a servant, representative, agent or delegate. He is an embodiment of the company or, one could say, he hears and speaks through the persona of the company, within his appropriate sphere, and his mind is the mind of the company. If it is a guilty mind then that guilt is the guilt of the company. It must be a question of law whether, once the facts have been ascertained, a person in doing particular things is to be regarded as the company or merely as the company's servant or agent. In that case any liability of the company can only be a statutory or vicarious liability.
In this case, a convincing argument could have been made that Mr Major assaulted the Claimant in his capacity as Managing Director. After all, the assault was an expression of his authority over the company and its employees, including the Claimant. Viewed in this way, it could be said that the assault on the Claimant was by the human embodiment of the company and that the assault was therefore by the company (as difficult as it may be to envisage a company acting-out a violent drunken rage). It might have been possible to hold the company liable for the assault in the circumstances without having to rely on the unpredictable doctrine of vicarious liability.
Adam Ohringer is an expert in the area of vicarious liability having appeared in the Court of Appeal and Supreme Court in Mohamud v WM Morrison plc [2016] AC 677. Please contact Cloisters on 0207 827 4000 to find out how Cloisters can help you and your client.